Robert Spalding, a former senior director of strategy to President Donald Trump, is applauding the decision of Taiwan Semiconductor Manufacturing Co. (TSMC), one of the top world’s chipmakers, to stop taking orders from Chinese telecom giant Huawei, while strongly recommending that the United States and its allies bring back some manufacturing from China.
Among factors affecting the world’s chipmakers are traditional Intel-based architecture being gradually replaced by neuromorphic computing, which resembles some functions of the human brain, and China’s work in the field of quantum computing, Spalding says.
In addition, the Chinese Communist Party (CCP) seeks to use Chinese SMIC as a chip supplier instead of TSMC, at a time when TSMC plans to build a factory in Arizona, Spalding said on July 22 in an interview at the Jamestown Foundation.
“The bottom line is TSMC is at the epicenter of a big struggle for the future of the semiconductor world,” Spalding said.
For the sake of national security, the United States must win this battle through reshoring—bringing manufacturing back from overseas—and partnering with allies to ensure that no semiconductor technology will flow to China, Spalding said, calling the struggle for chip technology dominance the main battle of “the second cold war.”
“We need to figure out how to have an industrial policy that protects the United States’ industrial base and it really focuses incentives on companies in the United States and in allied countries to rebuild a supply chain that we can be assured that is not infected with Chinese Communist Party technology,” Spalding said.
Spalding has supported such policy, quoting on Twitter a paragraph of an article by Global Economic Warfare: “The Securities and Exchange Commission (SEC) must now take the moral, ethical, and legal decision to deregister and delist any Chinese company shares that fail to follow our accounting rules, disclosure requirements, and securities laws.”
"The Securities and Exchange Commission (SEC) must now take the moral, ethical, and legal decision to deregister and delist any Chinese company shares that fail to follow our accounting rules, disclosure requirements, and securities laws." https://t.co/stCj3Prz5R
— General Spalding (@robert_spalding) May 14, 2020
Spalding considers the flow of American innovation technology talent and capital to China a major challenge.
“Once we eliminate the flow of those things and we redirect them into the United States and other democracies, you’re going to see a real change in the economic competitiveness of democracies vis-a-vis the authoritarian side of the bipolar world,” he said.
This strategy has been in effect for almost three years now, he said, adding, “I think you’re going to see a lot of reshoring in the next three to five years.”
“I think we just need to get better at implementing the authority,
the existing authorities, that the Department of Defense has, to reinvigorate the U.S. industrial base,” Spalding said.
TSMC in May suspended new orders for chips from Huawei, one of its main customers, and will stop shipping chips to Huawei after Sept. 14 in compliance with U.S. regulations, according to the Nikkei Asian Review.
The U.S. Department of Commerce toughened its export restrictions for non-U.S. chip companies requiring them to apply for licenses to use American technology and tools to supply chips to Huawei or its chip design division, HiSilicon, according to Nikkei.
TSMC doesn’t forecast any effects on its revenue due to this decision, although it warned of some uncertainties, according to Nikkei, adding that it hasn’t been affected by the pandemic.